Mark Yaffe, head of a worldwide coin wholesale business based in Tampa, will have to liquidate millions of dollars worth of rare coins and antique music machines to satisfy his creditors.
Yaffe filed for Chapter 11 bankruptcy in July when Boston's Sovereign Bank called a $35 million loan. The bank accused Yaffe of misusing money to, among other things, build a 29,000-square-foot mansion in Tampa's Avila neighborhood.
On Wednesday, after inconclusive mediation between the bank and Yaffe, Sovereign got the court's permission to confiscate and sell coins and music machines worth an estimated $18 million.
Yaffe is among the top collectors of electric and mechanical music contraptions, the display of which dictated the design of his mansion, Tampa Bay's second biggest house.
U.S. bankruptcy Judge Michael Williamson agreed that Sovereign had waited long enough for Yaffe to come up with a reorganization plan to satisfy creditors.
Yaffe's lawyers didn't contest the liquidation, recognizing the bank's claim to the collateral. Since the bankruptcy filing last year, the court has stashed the coins in a Brink's vault.
"The bank understandably wants to start seeing some cash," said Daniel Saxe, one of Yaffe's lawyers.
Williams urged the parties to resume mediation. Yaffe shut down National Gold Exchange's Carrollwood office but continues to buy and sell coins through a new entity called Phoenix Gold Corp.
Richard McIntyre, Yaffe's bankruptcy attorney, said Phoenix has been very successful and aims to pay off National Gold Exchange's debts over seven years. At its peak, National Gold did about $500,000 worth of business a week.